Gold continued its recent upward march to $2,155 an ounce, scaling its highest levels on record as the dollar and Treasury yields weakened on hopes that the US Federal Reserve will start cutting interest rates soon amid growing economic gloom. The Beige Book Survey said the economy expanded slightly since the beginning of the year, while consumers showed more sensitivity to rising prices. US equity markets rose – S&P 500 (+0.5%), Nasdaq (+0.6%) – and the 10-year Treasury currently yields 4.11%
This morning in Asia, markets were generally lower: Nikkei 225 (-1.2); Hang Seng (-1.3%); Shanghai Composite (-0.4%). The yen climbed to a one-month high on speculation the BOJ will raise rates in March. Driving market chatter today: the acceleration in wage growth and remarks by board member Junko Nakagawa on Japan’s economy steadily making progress toward the BOJ’s 2% price target. Several government officials were also said to support a hike in the near term.
Sterling trades at $1.2740 and €1.1695, while the FTSE 100 is currently trading 0.3% lower at 7,658. Companies trading ex-dividend include HSBC (3.97%), Rio Tinto (4.02%), Standard Chartered (2.43%), and Berkeley Group (0.72%). Nationwide offered to buy Virgin Money for 218p a share and a proposed dividend of 2p, valuing the company at £2.9bn. Virgin is trading up 35% this morning.
